SOCIO-ECONOMIC SHOCKS AND THE INFORMAL SECTOR: A POLITICAL ECONOMY ANALYSIS OF PETROL SUBSIDY REMOVAL IN KOGI STATE, NIGERIA

Abstract

On May 29, 2023 President Bola Ahmed Tinubu made the pronouncement of fuel subsidy removal, this marked a significant shift in Nigeria’s neoliberal trajectory. This policy shift has fundamentally restricted the entrepreneurial and economic freedoms previously buoyed by a welfarist market structure. Crucially, it has strained the social networks and collective organizations that traditionally protect individual informal workers such as petty traders, artisans, and commercial transport operators within peri-urban communities. This study argues that the withdrawal of fuel subsidies, and the subsequent economic hardships, has disproportionately devastated the informal economy in these areas, primarily due to the conspicuous absence of robust social protection programmes for vulnerable populations. The research utilizes a qualitative dominant approach, focusing on Kogi State, where data was generated through Key Informant Interviews (KII) and Focus Group Discussions (FGD) across three senatorial districts. Findings indicate that the policy has significantly reduced the personal income of informal workers and hampered government revenue at the local level. Furthermore, the study highlights a "slow growth rate" in peri-urban zones compared to urban centers, as palliatives often fail to reach these peripheral communities. The study concludes that sustainable economic development in the Fourth Republic requires a policy recalibration, including the provision of financial capital, material palliatives, and accessible social protection facilities specifically tailored for peri-urban informal workers. Addressing these gaps is vital to fulfilling the social contract and mitigating the civil unrest associated with subsidy removal.